Do you use Project Risk Response Strategies to avail Opportunities?
Let us be frank here. Most of us never think about Project Risk Response Strategies for Opportunities. We usually ignore the Opportunities and think only about threats. Many of you would vociferously disagree with me. Well, I am not talking about Life Opportunities. In the current context, I am talking only about the Project Opportunities. In my experience Projects Managers seldom identify Project Opportunities. Even if they identify the Opportunities, it is usually because of organization procedures or senior management pressure.
There could be many reasons for not managing the Project Opportunities (Identifying, Assessing & Availing). Mostly these reasons are psychological in nature, but let us not delve into those reasons.
I would urge you to give some importance to the Opportunities. Ideally you should give equal importance to Threats and Opportunities.
Opportunity is missed by most people because it is dressed in overalls and looks like work.
Thomas A. Edison
I have written this article about the opportunities and project risk response strategies for the opportunities. If you are looking for project risk response strategies for the threats then you should read my other article.
Let us assume that a Project Manager has identified a few Project Opportunities. Let us discuss how Project Risk Response Strategies (also called Project Risk Management Strategies) would help the Project Manager in dealing with the Opportunities. Let us also understand which strategy would be useful in which scenario.
Project Risk Management Strategies for Opportunities
PMBOK Guide defines 4 Strategies that deal with the Project Opportunities.
There are 2 important components of any Risk Event – Probability and Impact. In order to deal with the Project Opportunities, you can act upon one or both of these components. Let us understand the 4 Project Risk Management Strategies in the context of Probability and Impact.
This strategy is adopted if you want to definitely attain a Project Opportunity. This is an absolute risk management strategy that removes the uncertainty (Probability) associated with the Positive Risk Event. By adopting this strategy, you make sure that the Project Opportunity is realized – you take steps to make the Probability of the Positive Risk Event as 1.
Equivalent Strategy for Threats – Avoid.
As the name suggests, you can use this strategy to increase the Probability (reduce the uncertainty) or the Impact or both associated with a Positive Risk Event. By employing this strategy one of the following 3 things might happen:
– Probability of the Positive Risk Event increases
– Impact of the Positive Risk Event increases
– Both Probability and Impact of the Positive Risk Event increase
Equivalent Strategy for Threats – Mitigate.
This strategy is usually adopted, if the Project Team does not have the ample capability or capacity to avail a Project Opportunity. In this strategy complete or part of the Ownership of the Project Opportunity is Shared with an external organization. Usually, the chosen organization has objectives similar to the Project Team. Together the organization and the Project Team make an attempt to avail the Opportunity. In this strategy, the Project Team and the external organization may share Cost, Resources, Knowledge etc. in order to avail the Opportunity. If the Opportunity is realized, the benefits (Impact of the Positive Risk Event) are also Shared.
Equivalent Strategy for Threats – Transfer.
This strategy is adopted if the Project Manager does not want to actively pursue a Project Opportunity. This is really a “Do Nothing” Strategy. The benefits of the Opportunity (Impact of the Positive Risk Event) are Accepted if and when they come. By employing this strategy the project plan is not changed and no change happens to either Probability or Impact of the Positive Risk Event.
Equivalent Strategy for Threats – Accept.
Do you think change in PMP Exam is an Opportunity or a Threat? If you consider it as an Opportunity, how are you dealing with it? Please leave a comment.